WTO Calls Russian Import Duties Violations

In a ruling circulated last week, a WTO panel confirmed that Russian import duties on paper, refrigerators and palm oil violate WTO rules,  the European Commission reports in the official notice. The import duties exceed those Russia agreed to when it joined the WTO. The WTO‘s ruling, which vindicates claims by the European Union, is the first against Russia since the country joined the organization in 2012.

Despite being a WTO member since August 2012, Russia has not yet fulfilled some of its commitments made before its accession. This includes one of the WTO’s most fundamental rules, according to which its members must not apply customs duties in excess of the ‘bound rates’ they commit themselves to in their respective Schedules. Following the dispute settlement procedure activated by the EU in October 2014, the WTO panel fully agreed that Russia’s customs duties on paper, refrigerators and palm oil are inconsistent with its WTO commitments.

For certain paper products Russia applies duties of 15% or 10% instead of the 5% it agreed when it joined the WTO.  For other products, Russia essentially fixes a minimum amount of import duty that needs to be paid even if this is not justified by the agreed duty rate (reflected in Russia’s accession schedule) that is expressed in a percentage of the product value.  Indeed, they imply that import duties are levied in excess of WTO-bound levels whenever products are imported at a certain price. Those measures are severely hampering trade in important sectors.

In the recent past, the EU has initiated Dispute Settlement procedures on a number of other trade barriers imposed by Russia, such as recycling fees on cars, a ban on import of pigs and pork, and antidumping duties on light commercial vehicles. These other procedures are ongoing. Russia put such measures in place in late 2014 to retaliate against Western sanctions related to Moscow‘s role in the Ukraine conflict.

Russia has already brought some of the challenged measures into compliance in the course of the panel proceedings. The panel report can be appealed within 60 days. If no appeal is filed within that deadline the report will be adopted and Russia will be bound to comply with the recommendation to bring all the concerned measures into line with WTO rules.

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